Background
As part of last weeks budget the 2020/21 Vehicle Excise Duty (VED) rates were announced, these rates are set to take effect from 1st April 2020. Those who are looking to purchase a new car only have just over a week to utilise the old system.
The way in which CO2 Emissions of a vehicle are tested are also due to change with the old outdated New European Driving Cycle test (NEDC) method which was last updated in 1997 making was for the new up to date Worldwide Harmonised Light Vehicles Test Procedure (WLTP) method replacing it.
As a result of the change it is highly likely that most if not all cars CO2 emission outputs will change, potentially pushing cars into higher tax bands causing increases in the cost of your road fund licence in the first year. For example a Jaguar E-Pace could see an increase of up to £960.00 in the first year.
The actual rates, which you can find below, do not increase by a large amount when comparing to the 2019/20 tax year. The new WLTP method will have a significant effect as show in the example above.
2020/21 Rates
The bands for cars registered on or after 1 April 2017 are:
Further to these rates there is a surcharge for any cars that had a list price of £40,000 or greater when new, this surcharge is £325 and is due on top of the standard rate each year for the first five years.
The bands for cars registered after 1 March 2001 but before 1 April 2017 are:
| CO2 emissions (g/km) | Standard rate (2020-2021) |
|---|---|
| Up to 100 | £0 |
| 101-110 | £20 |
| 111-120 | £30 |
| 121-130 | £130 |
| 131-140 | £150 |
| 141-150 | £165 |
| 151-165 | £205 |
| 166-175 | £240 |
| 176-185 | £265 |
| 186-200 | £305 |
| 201-225 | £330 |
| 226-255 | £565 |
| Over 255 | £580 |
The Rates for cars registered before 1 March 2001 are:
| Engine size | Tax year 2020 to 2021 |
|---|---|
| 1549cc and below | £165 |
| Above 1549cc | £270 |
